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January 03, 2023

SourceToday | 2023 Distribution Outlook

SourceToday | 2023 Distribution Outlook

Challenges remain and the pace of growth may ease, but the 2023 Distributors Outlook is decidedly bullish.

After three years of challenging, dramatic growth in the distribution arena, key industry executives see a time of leveling off on the near horizon. That won’t mean a decrease in investments, particularly in the digital assets that helped manage the growth and stabilized the pandemic-fueled activity of the recent past. Respondents to the 2023 Source Today Distributors Outlook expect a little calm and perhaps some better predictability in the coming year. But they also see continued growth and an ability to direct some of that growth into tools and strategies to better serve their customers regardless of the economic climate.

The following key insights were pulled from the entire article (download here).

Industry Forecast

The global issues of war and inflation do raise some concerns, according to Mark Goh, Sales Director, APAC, NewPower Worldwide. “We are cautiously optimistic about the business growth here at NewPower for 2023. Right now, the market is in a re-balancing situation. Customers are getting deliveries from manufacturers for many of the double bookings and buffering they did a year back when the market was clearly in a panic. This, together with significant headwinds currently in play, like the Russia-Ukraine war, the geopolitical tension between China and the USA, and inflation fear affecting consumer confidence to spend, caused many of our customers to cut their forecasts in 2023.”

Opportunities

“We see significant opportunity in all our current markets as demand continues to surge while lead times remain at all-time highs. Emerging markets offer additional revenue opportunities but also put a strain on global supply chains as they struggle to keep up with production,” added Carleton Dufoe, Chief Executive Officer, NewPower Worldwide.

Investments

“In 2023, we are investing heavily in expanding NewPower’s global footprint of distribution hubs, and test and inspection facilities to minimize supply chain disruption due to conflicts in the geopolitical landscape (trade restrictions/sanctions) and unexpected events like pandemics and resultant lockdowns,” said Jeffrey Hong, General Manager, APAC, NewPower Worldwide.

Challenges

“NewPower’s most important initiative in 2023 is the management of the USA’s continued export restrictions,” said Garie Ang, Purchasing Manager, APAC, NewPower Worldwide. “Our industry has been expertly handling export restrictions for years, but the stakes have risen significantly as of October 2022. Organizations must pay close attention to MFG parts and rethink how they conduct business in and out of China. Clearly understanding and effectively managing these new restrictions will be mandatory to have a safe and secure electronic supply chain,” Ang added. “It is imperative that NewPower and all our customers, suppliers, and partners communicate and transact with transparency, as some of the ECCN (Export Control Classification Number) information is not readily available or easily accessible.”

The consensus of the distribution leaders is that while the level of chaos from the past three years may abate, the market remains strong and poised for growth.